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Venturewire / Dow Jones

April 28, 2004

New $250M Venture/Buyout Fund To Focus On Spinoffs

By Giada Cardoletti

New York, N.Y.—Seeking to capitalize on underperforming and non-strategic businesses spun out from public companies, Garnett & Helfrich Capital recently closed on its newly formed $250 million Venture Buyout fund, backed by Harvard University as the lead investor.

Launched by Terry Garnett and David Helfrich, who recently departed from two established venture firms, the firm’s strategy is to combine the financial methods used by buyout companies and venture capitalist firms. That would include leveraging debt as well as investing capital to help a company grow.

“Our firm is focused exclusively on spinning out these businesses as independent entities and repositioning them for improvement and growth,” said Helfrich, the firm’s managing director who helped start ComVentures, an early-stage venture fund with over $1.2 billion under management.

Helfrich said the fund will invest in eight to 10 companies, with an eye for two investments a year, the first of which should be announced in the next three months.

Garnett & Helfrich will be focused exclusively on technology companies in the fields of communications, Internet/media, semiconductors and software. Ideal investment candidates for the fund will have on-going annual revenue of $20 million to $100 million and up, but with potential for substantial improvement and growth based on new management, product development, market strategies and acquisitions.

Both Garnett and Helfrich have significant experience in the venture capital and technology sectors. Garnett, 47 years old, served both as general partner and venture partner at Venrock Associates and invested himself in a number of technology companies. Prior to joining Venrock he served as senior vice president of worldwide marketing and business development at Oracle Corp. (ORCL).

During his six years of venture-capital experience, Helfrich, 47 years old, led early-stage investments in CoSine, Entera, Internet Photonics and Intruvert, which generated over $2.5 billion though public offerings and acquisitions. Previously he founded and built Newbridge Networks, Ascend Communications, Centrum/3Com and Copper Mountain.

Garnett & Helfrich Capital’s other limited partners include Grove Street Advisors, Stanford Management Company, Harbourvest, RHO Management, University of Michigan, Columbia University, Comprehensive Financial Management and Capricorn Holdings.